REG-XP Power Ltd: Half-year Report <Origin Href="QuoteRef">XPP.L</Origin> - Part 1
31/07/2017 07:05
31 July 2017
XP Power Limited
(“XP”, “XP Power” or “the Group”)
Interim Results for the six months ended 30 June 2017
XP, a world-leading developer and manufacturer of critical power control
components for the electronics industry, today announces its interim results
for the six-month period ended 30 June 2017.
Six months ended Six months ended
30 June 2017 30 June 2016
(Unaudited) (Unaudited)
Highlights
Order intake £93.4m £61.6m
Revenue £80.2m £60.3m
Gross margin 46.9% 49.0%
Interim dividend per share (see Note 8) 31.0p 29.0p
Adjusted
Adjusted operating margin (1) 21.7% 21.9%
Adjusted profit before tax (1) £17.3m £13.1m
Adjusted profit attributable to equity holders (1) £13.0m £10.0m
Adjusted diluted earnings per share (see Note 9) (1) 67.3p 52.2p
Reported
Operating margin 18.1% 21.6%
Profit before tax £14.4m £12.9m
Profit attributable to equity holders £10.9m £9.8m
Diluted earnings per share 56.4p 51.1p
(1) Adjusted for intangibles amortisation of £0.1 million (1H 2016: £0.1
million), £2.8 million (1H 2016: £0.1 million) of advisory and aborted
acquisitions costs and £0.8 million (1H 2016: Nil) tax deduction related to
the aborted acquisitions
· Strong first half performance, with encouraging momentum in
orders and revenues as new design wins enter production, supported by a
recovery in capital equipment markets and Sterling weakness
· Order intake increased by 52% to £93.4 million (+35% in constant
currency)
· Revenue increased by 33% to £80.2 million (+18% in constant
currency)
· Gross margin decreased to 46.9% (1H 2016: 49.0%) due to exchange
rate effects and reallocation of certain manufacturing costs at EMCO in line
with Group policy
· Own-design XP product revenues increased 39% to a record £60.5
million (1H 2016: £43.4 million), and now represent 75% of total revenues (1H
2016: 72%)
· Revenues for ultra-high efficiency “Green XP Power” products
continue to grow and are up by 32% to £18.8 million (1H 2016: £14.2 million)
representing 23% of total revenue (1H 2016: 24%)
· Group to break ground on construction of a second manufacturing
facility in Vietnam in the second half of 2017 to expand capacity
· Dividend for the first half of 2017 of 31.0 pence per share (1H
2016: 29.0 pence per share) up 7%
James Peters, Chairman, commented:
“The Group has had a very strong first half. Reported order intake and
revenues for the first six months of 2017 all set new records, assisted by the
weakness of Sterling, a recovery in the capital equipment markets and,
significantly, new design wins entering their production phase.
Our balance sheet is strong and we are in an excellent position to make
selective acquisitions to further broaden our product offering and engineering
capabilities.
While we remain conscious of potential macroeconomic challenges, our strong
order book, combined with designs won in 2016 and prior years entering
production means that the Board now anticipates the Group’s performance for
the full year will be comfortably ahead of its existing expectations.”
Enquiries:
XP
Power
Duncan Penny, Chief Executive +44(0)7776
178 018
Jonathan Rhodes, Finance Director +44(0)7500
944 614
Citigate Dewe Rogerson +44(0)20 7638 9571
Kevin Smith/Jos Bieneman
Note to editors
XP Power is a leading international provider of essential power control
solutions. Power direct from the electricity grid is unsuitable for the
equipment which it supplies. XP Power designs and manufactures power
converters – components which convert power into the right form for our
individual customers’ needs, allowing their electronic equipment to
function. XP Power supplies the healthcare, industrial and technology
industries with this mission critical equipment. Significant, long term
investment into research and development means that XP Power's products
frequently offer significantly improved functionality and efficiency.
For further information, please visit www.xppower.com
31 July 2017
XP Power Limited
(“XP”, “XP Power” or “the Group”)
Interim Results for the six months ended 30 June 2017
INTERIM STATEMENT
Overview
The Group has had a very strong first half of 2017. Our reported order intake
and revenues for the first six months of 2017 all set new records, assisted by
the weakness of Sterling, a recovery in the capital equipment markets and,
significantly, new design wins entering their production phase. The resulting
solid earnings, cashflow generation and our confidence in the Group’s
outlook support a further increase in the dividend.
We have continued to execute well against our strategy and, most
encouragingly, we are now seeing the positive effect from design wins on the
newer product introductions. The successful implementation of our strategy
continues to drive market share gains and we are encouraged both by the
strength of our order book and our continued new program wins. Our strong
performance is enabling us to invest part of the cash generated from this
revenue growth to expand our engineering capabilities and fuel our future
growth.
Our strategy and value proposition
The Group has applied a consistent strategy of moving up the value chain and
our growth derives in part from the targeting of key account customers. Once
we are approved to supply these larger customers, we have continued to be
successful in gaining a larger share of their business. We also continue to
expand the breadth of our product portfolio, both organically and by
acquisition, in what remains a highly fragmented sector, therefore enabling us
to increase our addressable market.
Our value proposition to customers is to reduce their overall costs of design,
manufacture and operation. We achieve this by providing excellent sales
engineering support and producing new highly reliable products that are easy
to design into the customer’s system, consume less power, take up less space
and reduce installation times.
Our vision is to be the first choice power solutions provider, delivering the
ultimate experience for our customers and as a place of work for our people.
Trading and Financial Review
XP Power supplies power control solutions to original equipment manufacturers
(“OEMs”) who supply the healthcare, industrial and technology markets with
high value, high reliability products. The increasing importance of energy
efficiency for environmental, reliability and economic reasons; the necessity
for ever smaller products; the accelerating rate of technological change; and
the increasing proliferation of electronic equipment, have established a
strong foundation for growth in demand for XP Power’s products.
Order intake of £93.4 million (1H 2016: £61.6 million) was up 52% (35% in
constant currency) and set a new record for the Group. Compared to the same
period a year ago, Asia increased by 79%, Europe increased by 38% and North
America increased by 58%. The average US Dollar to Sterling exchange rate was
1.44 in the first half of 2016 compared with 1.26 in the first half of 2017
representing a 13% weakening of Sterling. This increased the reported order
intake in the first half by approximately £10.2 million, or 17%, compared to
the first half of 2016.
Order intake in the first half of 2017 surpassed revenues with a resultant
book-to-bill ratio of 1.16 (1H 2016: 1.02). Overall momentum has continued to
build in the business and we enter the second half of the current year with a
strong order book of £70.9 million (December 2016: £59.1 million).
Approximately half of the 35% order intake growth (in constant currency) came
from existing programs and half from programs which have entered production
within the last year or so.
Reported revenues grew 33% to £80.2 million in the six months to 30 June 2017
compared to £60.3 million in the same period a year ago. When adjusting to
constant currency the underlying growth was 18%.
Revenues in North America were £43.7 million (1H 2016: £30.8 million), up
42% compared to the same period a year ago. Revenues in Europe were £29.4
million (1H 2016: £24.6 million), up 20% on the same period a year ago.
Revenues in Asia were £7.1 million (1H 2016: £4.9 million), up 45% compared
with the same period a year ago.
The healthcare, industrial and technology sectors all delivered increased
revenue in all three of our regions (Asia, Europe and North America)
suggesting a general market recovery in the capital equipment markets we
serve. On a sector basis, revenues from healthcare grew by 36% to £23.8
million (1H 2016: £17.5 million). Industrial revenues increased by 19% to
£34.3 million (1H 2016: £28.8 million). The standout sector was technology
where revenues grew by 58% year on year to £22.1 million (1H 2016: £14.0
million) driven by the semiconductor manufacturing equipment makers who are
exhibiting strong and sustained growth. In terms of overall revenue for the
first half of 2017, industrial represented 43% (1H 2016: 48%), technology
represented 27% (1H 2016: 23%) and healthcare represented 30% (1H 2016: 29%).
Our customer base remains highly diversified with the largest customer
accounting for only 10% of revenue, spread over 120 different programs/part
numbers.
Margins
Gross margin in the first half of 2017 was 46.9% (1H 2016: 49.0%). A number of
factors led to a reduction compared to the first half of 2016. Proportionately
more of our cost of sales is denominated in US Dollars compared to our
revenues. As Sterling weakens, our reported revenues increase due to the
translation benefit but so do our cost of sales although at a greater rate.
The result is higher gross margins in absolute terms but the gross margin
percentage declines. The average exchange rate for converting US Dollars into
Sterling in the period was 1.26 in the first half of 2017 (1H 2016: 1.44); a
weakening of 13%. We also have revenues in Euro with costs in US Dollars. The
average exchange rate for converting Euro into Sterling in the period was 1.17
in the first half of 2017 (1H 2016: 1.30); a 10% weakening of Sterling. We
estimate that the effect of a weaker Sterling reduced the gross margin
percentage by 110 basis points.
In addition, approximately £0.8 million of costs were charged to cost of
sales in the first half of 2017 whereas the corresponding costs in 2016 were
charged to operating expenses. This was a result of the Group's continuous
assessment and integration of EMCO since its acquisition in November 2015
which had the effect of reducing the gross margin percentage by approximately
100 basis points.
Operating expenses in the first half were £20.2 million (1H 2016: £16.3
million) after deducting £0.1 million of intangibles amortisation (1H 2016:
£0.1 million) and £2.8 million of advisory and aborted acquisition costs (1H
2016: £0.1 million). Again, there is a significant translation effect from
the weakening of Sterling versus the US Dollar following the United
Kingdom’s decision to leave the European Union. We estimate that this
translation effect increased reported operating expenses by approximately
£2.0 million. In addition, we had the full period cost impact of the
additional sales and engineering resources added in 2016, plus those further
resources added in 2017 to support the growth in the business.
We are engaging in ever more complicated programs with many of our key
customers. These customers value XP Power’s engineering services and power
conversion expertise to get them to market more quickly and solve their
power-related challenges. Systems are becoming more complex and there is more
demand for power conversion solutions that communicate with both the
customers’ applications and with the outside world as the concept of an
Internet of Things promulgates. This area of the market allows us to add more
value to our customers’ engineering teams and is less crowded with low cost
Asian competition. As such, we are reinvesting part of the cash returns
generated from our growth to fund further expansion of our engineering
capabilities.
Gross product development spend was £5.5 million (1H 2016: £3.8 million),
£2.0 million of which was capitalised (1H 2016: £2.0 million), and £1.2
million amortised (1H 2016: £1.0 million).
Notwithstanding our investment in additional sales, customer support and
engineering resources to support future growth, we continue to achieve
excellent adjusted operating margins of 21.7% (1H 2016: 21.9%) highlighting
the strength of our business model.
Taxation
The tax charge for the period was £3.2 million (1H 2016: £2.9 million) which
represents an effective tax rate of 22.2% (1H 2016: 22.5%). We have used an
effective tax rate of 23% to compute the adjusted earnings per share.
We currently expect our future tax rate to be in the range of 22% to 24%
depending on the geographic distribution of our future profits.
Financial Position
Class-leading gross and operating margins and modest capital requirements have
resulted in continued strong cash flow. After payment of the 2016 final
dividend our net cash was £8.0 million at 30 June 2017. This compares with
net cash of £3.7 million at 31 December 2016 and net debt of £6.0 million at
30 June 2016.
Product Development
New products are fundamental to our revenue growth. The broader our product
offering, the more opportunity we have to increase revenues by expanding our
available market. As expected, the significant number of new product families
introduced over the last three years has yet to have a material impact on our
revenues, given the time lag from launch to production. This is due to the
lengthy design-in cycles required by customers to qualify the power converter
in their equipment, as well as by the requirement to gain the necessary safety
agency approvals.
XP launched 14 new product families in the first half of 2017 (1H 2016: 27).
The relatively high number of new product introductions in 2016 was aided by
the introduction of a new labelled product supplier to increase our offering
of DC-DC converters. We continue to lead our industry on the introduction of
high efficiency, “green” products, with 12 of those new products released
in the first half of 2017 being of high efficiency design and/or low stand-by
power.
Revenue from own design products was £60.5 million (1H 2016: £43.4 million)
up 39% from the same period in 2016 and now represents 75% of total revenue
(1H 2016: 72%).
With larger customers continuing to reduce the number of vendors they deal
with, XP Power’s broad product offering, excellent global engineering
support, in-house manufacturing capability and industry-leading environmental
credentials leave the Group well-placed to secure further preferred supplier
agreements.
Manufacturing Progress
XP Power’s move into manufacturing in 2006 has been instrumental in enabling
the Group to win approved and preferred supplier status with new Blue Chip
customers who value suppliers that have complete control over their supply
chain and product manufacture to ensure the highest levels of quality and
agility.
To supplement our original Chinese manufacturing facility in Kunshan near
Shanghai, our Vietnamese manufacturing facility, located in Ho Chi Minh City,
began production of its first magnetic components in March 2012 and is now
producing the majority of the Group’s requirement for magnetics.
Producing our own magnetic components in Vietnam is helping us mitigate the
continued rise of Chinese labour costs and the appreciation of the Chinese
Renminbi. In addition, extending vertical integration to the critical magnetic
components used in power converters is seen as an additional value proposition
by many of our customers, notably in the healthcare and high reliability
industrial sectors.
In the fourth quarter of 2014 we began production of the first complete power
converters in Vietnam. We now have 259 (1H 2016: 113) part numbers approved
for production in Vietnam with more in the pipeline. XP manufactured 693,000
(1H 2016: 550,000) power converters in total during the first half of 2017 and
416,000 (1H 2016: 140,000) of these were produced in Vietnam. We expect the
proportion of power converters produced in Vietnam to increase further as we
transfer more products to that facility. Kunshan will focus on the higher
power, higher complexity products.
We intend to break ground and commence construction of a second factory on our
existing site in Vietnam in the second half of this year, with production
scheduled to come on stream in 2019. We estimate that our existing Asian
manufacturing facilities have the capacity to produce approximately US$170
million of end revenue of our own manufactured products. The second facility
in Vietnam will add an additional capability of approximately US$130 million
of revenue.
We estimate the cost of the Vietnam II building and the initial equipment set
to be approximately US$6.5 million, of which US$1.9 million will be incurred
in the second half of 2017 and the remainder in 2018.
Dividend
The Company makes quarterly dividend payments. Our strong cash flow and
confidence in the Group’s prospects have enabled us to increase total
dividends for the first half by 7% to 31.0 pence per share (1H 2016: 29.0
pence per share).
The first quarter dividend payment of 15 pence per share was made on 10 July
2017. The second quarter dividend of 16 pence per share will be paid on 12
October 2017 to shareholders on the register at 15 September 2017.
The compound average growth rate in dividends over the last 10 years has been
14%.
Environmental Impact and “Green XP Power” products
XP Power has placed improved environmental performance at the heart of its
operations both in terms of minimising the impact its activities have on the
environment and, as importantly, in its product development strategy.
We have developed a class-leading portfolio of green products with
efficiencies up to 95% and many of these products also have low stand-by power
(a feature to reduce the power consumed while the end equipment is not
operational but in stand-by mode). Revenues for these ultra-high efficiency
“Green XP Power” products continue to grow and are up by 32% to £18.8
million (1H 2016: £14.2 million) representing 23% of total revenue (1H 2016:
24%).
Brexit
The continuing weakness of Sterling versus the US Dollar since the United
Kingdom voted to leave the European Union in June 2016 has a material effect
on the presentation of our financial results. Approximately 81% of our
revenues are denominated in US Dollars and the translation of these revenues
into Sterling for reporting purposes has had a beneficial effect. However, the
majority of our cost of sales and a large proportion of our operating expenses
are also denominated in US Dollars for which the translation into Sterling has
a negative impact, thereby significantly dampening any effect on the operating
margin.
In terms of the broader economic impacts of Brexit on our business, we do not
consider that they will be material. Our products are made in Asia and are
already imported into Europe where we have warehouses in bothGermany and the
United Kingdom. In the event that the United Kingdom leaves the single market,
we would simply ship more of our product destined for the EU directly into
Germany or another appropriate location.
Acquisitions
As previously announced, the Group is actively seeking acquisitions to broaden
its product offering and engineering capabilities, and further underpin its
future growth. Advisory and abortive acquisitions costs in the period were
£2.8 million (1H 2016: £0.1 million).
We continue to review suitable acquisition opportunities.
Outlook
We have made a very strong start to 2017 and the momentum experienced in the
second half of 2016 has accelerated in the first half of the current year. We
had a strong book-to-bill ratio in the first half of 2017 of 1.16 and a
customer order book of £70.9 million. We are confident that our new product
releases and design wins over the last few years are supporting our revenue
growth. While we remain conscious of potential macroeconomic challenges, the
combination of these factors means that the Board now anticipates the
Group’s performance for the full year will be comfortably ahead of its
existing expectations.
The Group has a strong balance sheet which places us in an excellent position
to make selective acquisitions to further broaden our product offering and
engineering capabilities. We believe we are now well along the path to
achieving our vision of becoming the first choice power solutions provider to
our existing and target customer base.
Independent review report to XP Power Limited
Report on review of interim financial information
Introduction
We have reviewed the accompanying consolidated condensed financial information
of XP Power Limited (“the Company”) and its subsidiaries (“the Group”)
set out on pages 9 to 18, which comprise the consolidated condensed balance
sheet of the Group as at 30 June 2017, the consolidated condensed statements
of comprehensive income, changes in equity and cash flows for the 6-month
period then ended and the related notes. Management is responsible for the
preparation and presentation of this consolidated condensed interim financial
information in accordance with International Accounting Standard 34 Interim
Financial Reporting as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom’s Financial Conduct Authority. Our
responsibility is to express a conclusion on this interim financial
information based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements 2410, Review of Interim Financial Information Performed by the
Independent Auditor of the Entity. A review of interim financial information
consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the half-yearly financial
report, which comprise the “Interim Results” set out on pages 1 to 2,
“Interim Statement” set out on pages 3 to 7 and “Note 14 - Risks and
uncertainties” set out on pages 19 to 20, and considered whether it contains
any apparent misstatements or material inconsistencies with the information in
the financial information.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the accompanying consolidated condensed interim financial
information is not prepared, in all material respects, in accordance with
International Accounting Standard 34 Interim Financial Reporting as adopted by
the European Union and the Disclosure and Transparency Rules of the United
Kingdom’s Financial Conduct Authority.
PricewaterhouseCoopers LLP
Public Accountants and Chartered Accountants
Singapore,
XP Power Limited
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2017
£ Millions Note Six months ended 30 June 2017 (Unaudited) Six months ended 30 June 2016 (Unaudited)
Revenue 5 80.2 60.3
Cost of sales 6 (42.6) (30.8)
Gross profit 37.6 29.5
Operating expenses 6 (23.1) (16.5)
Operating profit 14.5 13.0
Finance cost 6 (0.1) (0.1)
Profit before income tax 14.4 12.9
Income tax expense 7 (3.2) (2.9)
Profit after income tax 11.2 10.0
Other comprehensive income:
Cash flow hedges (0.6) -
Exchange differences on translation of foreign operations (0.9) 6.8
Other comprehensive income, net of tax (1.5) 6.8
Total comprehensive income 9.7 16.8
Profit attributable to:
- Equity holders of the Company 10.9 9.8
- Non-controlling interests 0.3 0.2
11.2 10.0
Total comprehensive income attributable to :
- Equity holders of the Company 9.4 16.6
- Non-controlling interests 0.3 0.2
9.7 16.8
Earnings per share attributable to equity holders of the Company Pence per Share Pence per Share
Basic 9 57.2 51.6
Diluted 9 56.4 51.1
Diluted adjusted 9 67.3 52.2
XP Power Limited
Consolidated Balance Sheet
At 30 June 2017
£ Millions Note At 30 June 2017 (Unaudited) At 31 December 2016 At 30 June 2016 (Unaudited)
ASSETS
Current assets
Cash and cash equivalents 11 11.3 9.2 5.8
Inventories 33.0 32.2 33.6
Trade receivables 23.2 21.5 21.3
Other current assets 2.3 2.4 2.0
Derivative financial instruments - 0.4 -
Total current assets 69.8 65.7 62.7
Non-current assets
Goodwill 37.5 37.7 38.6
Intangible assets 10 15.9 15.3 13.3
Property, plant and equipment 19.5 19.1 17.9
Deferred income tax assets 0.4 0.4 0.4
ESOP loans to employees 0.4 0.7 0.7
Total non-current assets 73.7 73.2 70.9
Total assets 143.5 138.9 133.6
LIABILITIES
Current liabilities
Current income tax liabilities 3.1 3.3 2.3
Trade and other payables 22.2 16.1 14.9
Provision for deferred contingent consideration - 0.5 -
Borrowings 12 3.3 5.5 9.2
Derivative financial instruments 0.1 0.4 0.3
Total current liabilities 28.7 25.8 26.7
Non-current liabilities
Provision for deferred contingent consideration 1.5 1.5 1.5
Borrowings 12 - - 2.6
Deferred income tax liabilities 4.6 4.7 4.3
Total non-current liabilities 6.1 6.2 8.4
Total liabilities 34.8 32.0 35.1
NET ASSETS 108.7 106.9 98.5
EQUITY
Equity attributable to equity holders of the Company
Share capital 27.2 27.2 27.2
Merger reserve 0.2 0.2 0.2
Treasury shares 0.1 (0.5) (0.8)
Hedging reserve (0.3) 0.3 0.1
Translation reserve 2.6 3.5 1.5
Retained earnings 78.0 75.4 69.4
107.8 106.1 97.6
Non-controlling interests 0.9 0.8 0.9
TOTAL EQUITY 108.7 106.9 98.5
XP Power Limited
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2017 (Unaudited)
£ Millions
Attributable to equity holders of the Company
Share capital Treasury shares Merger reserve Hedging reserve Translation reserve Retained earnings Total Non-controlling interests Total Equity
Balance at 1 January 2016 27.2 (1.0) 0.2 0.1 (5.3) 67.1 88.3 0.8 89.1
Sale of treasury shares - 0.1 - - - (0.1) - - -
Purchase of treasury shares - - - - - - - - -
Employee share option plan expenses - 0.1 - - - - 0.1 - 0.1
Dividends paid - - - - - (7.4) (7.4) (0.1) (7.5)
Total comprehensive income for the period - - - - 6.8 9.8 16.6 0.2 16.8
Balance at 30 June 2016 27.2 (0.8) 0.2 0.1 1.5 69.4 97.6 0.9 98.5
Balance at 1 January 2017 27.2 (0.5) 0.2 0.3 3.5 75.4 106.1 0.8 106.9
Sale of treasury shares - 0.7 - - - (0.3) 0.4 - 0.4
Purchase of treasury shares - (0.2) - - - - (0.2) - (0.2)
Employee share option plan expenses - 0.1 - - - - 0.1 - 0.1
Dividends paid - - - - - (8.0) (8.0) (0.2) (8.2)
Total comprehensive income for the period - - - (0.6) (0.9) 10.9 9.4 0.3 9.7
Balance at 30 June 2017 27.2 0.1 0.2 (0.3) 2.6 78.0 107.8 0.9 108.7
XP Power Limited
Consolidated Statement of Cash Flows
For the six months ended 30 June 2017
£ Millions Note Six months ended 30 June 2017 (Unaudited) Six months ended 30 June 2016 (Unaudited)
Cash flows from operating activities
Total profit 11.1 10.0
Adjustments for
- Income tax expense 3.2 2.9
- Amortisation and depreciation 2.7 2.2
- Finance charge 0.1 0.1
- ESOP expenses 0.1 0.1
- Fair value (gain)/loss on derivative financial instruments (0.6) 0.3
- Unrealised currency translation (gain)/loss (0.5) 3.4
Change in the working capital
- Inventories (0.8) (4.9)
- Trade and other receivables (1.6) (3.4)
- Trade and other payables 6.1 0.3
Cash generated from operations 19.8 11.0
- Income tax paid (3.4) (1.8)
Net cash provided by operating activities 16.4 9.2
Cash flows from investing activities
Purchases and construction of property, plant and equipment (2.0) (1.2)
Capitalisation of research and development expenditure 6 (2.0) (2.0)
Repayment of ESOP loan 0.3 -
Payment of deferred consideration (0.5) -
Net cash used in investing activities (4.2) (3.2)
Cash flows from financing activities
Repayment of borrowings (2.7) (1.2)
Sale of treasury shares by ESOP 0.7 0.1
Purchase of treasury shares by ESOP (0.2) -
Interest paid - (0.1)
Dividends paid to equity holders of the Company (8.0) (7.4)
Dividends paid to non-controlling interests (0.2) (0.1)
Net cash used in financing activities (10.4) (8.7)
Net increase/(decrease) in cash and cash equivalents 1.8 (2.7)
Cash and cash equivalents at the start of the period 9.2 4.3
Effects of currency translation on cash and cash equivalents (0.3) 0.2
Cash and cash equivalents at the end of the period 11 10.7 1.8
£ Millions Note Six months ended 30 June 2017 (Unaudited) Six months ended 30 June 2016 (Unaudited)
Reconciliation of changes in cash and cash equivalents to movement in net cash/(debt)
Net increase/(decrease) in cash and cash equivalents 1.8 (2.7)
Repayment of borrowings 2.7 1.2
Effects of currency translation (0.2) (0.8)
Movement in net cash/(debt) 4.3 (2.3)
Net cash/(debt) at the start of the period 3.7 (3.7)
Net cash/(debt) at the end of the period 8.0 (6.0)
XP Power Limited
Notes to the Interim Results for the six months ended 30 June 2017
1. General information
XP Power Limited (the “Company”) is listed on the London
Stock Exchange and incorporated and domiciled in Singapore. The address of
its registered office is 401 Commonwealth Drive, Lobby B #02-02, Haw Par
Technocentre, Singapore 149598.
The nature of the Group’s operations and its principal
activities is to provide power supply solutions to the electronics industry.
These condensed consolidated interim financial statements are
presented in Pounds Sterling (GBP).
2. Basis of preparation
The condensed consolidated interim financial statements for the
period ended 30 June 2017 have been prepared in accordance with the Disclosure
and Transparency Rules of the United Kingdom’s Financial Conduct Authority
and with International Accounting Standards (“IAS”) 34 Interim Financial
Reporting as adopted by the European Union.
The condensed consolidated interim financial statements should be
read in conjunction with the annual financial statements for the year ended 31
December 2016 which have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) as adopted by the European Union.
3. Going Concern
The directors, after making enquiries, are of the view, as at the time of
approving the financial statements, that there is a reasonable expectation
that the Group will have adequate resources to continue operating for the
foreseeable future and therefore the going concern basis has been adopted in
preparing these financial statements.
4. Accounting policies
The condensed consolidated interim financial statements have been
prepared under the historical cost convention except for the fair value of
derivatives in accordance with IFRS 9 Financial Instruments.
The same accounting policies, presentation and methods of
computation are followed in these condensed consolidated interim financial
statements as were applied in the presentation of the Group’s financial
statements for the year ended 31 December 2016.
5. Segmented analysis
The Group operates substantially in one class of business, the
provision of power control solutions to the electronics industry. Analysis of
total Group operating profit, total assets, total revenue and total Group
profit before taxation by geographical region is set out below.
£ Millions Six months ended 30 June 2017 (Unaudited) Six months ended 30 June 2016 (Unaudited)
Revenue
Europe 29.4 24.6
North America 43.7 30.8
Asia 7.1 4.9
Total revenue 80.2 60.3
5. Segmented analysis (continued)
£ Millions Six months ended 30 June 2017 (Unaudited) Six months ended 30 June 2016 (Unaudited)
Total assets
Europe 29.0 26.7
North America 58.0 63.5
Asia 56.1 43.0
Segment assets 143.1 133.2
Unallocated deferred tax 0.4 0.4
Total assets 143.5 133.6
Reconciliation of operating profit by segment to profit after
income tax:
£ Millions Six months ended 30 June 2017 (Unaudited) Six months ended 30 June 2016 (Unaudited)
Europe 7.7 6.0
North America 14.5 10.4
Asia 1.1 1.1
Operating profit by segment 23.3 17.5
Research and development cost (4.7) (2.8)
Finance charge (0.1) (0.1)
Corporate recovery from operating segment (4.1) (1.7)
Profit before income tax 14.4 12.9
Income tax expense (3.2) (2.9)
Profit after income tax 11.2 10.0
The Group operates in the following regions and countries:
£ Millions Six months ended 30 June 2017 (Unaudited) Six months ended 30 June 2016 (Unaudited)
Revenue
North America 43.7 30.8
United Kingdom 15.0 13.0
Singapore 6.0 4.4
Germany 6.6 5.5
Switzerland 1.5 2.1
Other countries 7.4 4.5
Total revenue 80.2 60.3
6. Expenses by nature
£ Millions Six months ended 30 June 2017 (Unaudited) Six months ended 30 June 2016 (Unaudited)
Profit for the period is after charging/(crediting):
Amortisation of intangible assets 1.4 1.1
Depreciation of property, plant and equipment 1.3 1.1
Foreign exchange (gain)/loss (0.4) 0.2
Loss/(gain) on foreign exchange forwards
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